Source Code Stolen from Former Company | Cytelligence

Cytelligence’s client, a software vendor in the healthcare field, lost a contract to a competing software vendor selling an equivalent software-based service.

The competing software vendor was a new startup, formed by an ex-employee, who had been with his former company for 12 years. The ex-employee formed his new company nine months after leaving his former employer. He was not a line employee, but actually the head of an 8-person Information Technology department.

It seemed strange. It seemed too much of a coincidence. The software vendor decided to investigate its new competitor in the marketplace. The former employer suspected that the new company’s product was built from their software – their intellectual property – worth hundreds of thousands of dollars per client.

Meanwhile, the ex-employee denied copying any of the former employer’s source code, and asserted that any similarities were due to the usage of common, open source components between the two products.

“The ex-employee had a good story, one that we’ve heard before. Many times!” says Daniel Tobok, CEO of Cytelligence.

Under the strictest confidentiality, Cytelligence was hired to perform a forensic analysis of the source code of both sets of software. Cytelligence assigned a forensic examiner, a security analyst, and a security application specialist to the case. The forensic analysis took two weeks.

“We found the ‘smoking gun’,” said Tobok.

“We found that the ex-employee had stolen the source code for his new startup company from his former employer. It was not open-source software,” said Tobok.

“Code is written in a programming language, a certain format, and a certain style. The format and the style are hard to duplicate among software programmers. Writing code is like handwriting, it is personal and its style is attributable to one programmer. This ex-employee basically used the copy-and-paste command to create his new software code,” said Tobok.

“The code never lies,” he added.

The evidence obtained by Cytelligence was so strong that the parties settled their dispute out of court, with the ex-employee paying money to his former employers. The matter did not proceed to trial.